US Dollar Continues Epic Run Higher

US Dollar vs Japanese Yen Technical Analysis

The US dollar rallied yet again during the trading session on Wednesday to break out above the ¥125 level. This is a very important level to pay close attention to, as it is a major barrier going back several years. Now that we are breaking above your, we will likely continue to see the Japanese yen continue to get hammered. Look at this chart, we are overbought, but this shows no signs of letting up. At this point, I believe that short-term pullbacks will continue to offer value, especially now that we have so clearly smashed through major resistance barriers.

The interest rate differential between the United States and Japan will continue to drive this pair, especially as the Bank of Japan is stepping into the markets and driving rates down by “printing yen.” As they are forced to step into the market like that, it does devalue the local currency, and therefore we should continue to see this trend play out. I believe that it is more likely than not only a matter of time before we go much higher. Underneath, I believe that the ¥122.50 level offers a significant amount of support, perhaps extending down to the ¥121.50 level.

As far as selling is concerned, I have no interest in doing so, at least not until we break down below the ¥120 level at the very minimum. I do not necessarily think that is going to happen anytime soon, but it is something to keep in the back of your mind that it is very much possible, especially if we get some type of reversal by the Bank of Japan.

USD/JPY Price Forecast Video 12.04.22

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